With consumers opening up their wallets at the stores, retail stocks are also flying off the shelves these days. Of course, BetterInvesting members know that the time to buy was when the market was still in the doldrums and the real bargains were there for the grabbing.
Still, if you like the merchandise, you may want to buy. To learn more about what drives the retailers who drive us to part with our hard-earned money, see Forbes on “By The Numbers: Why Macy’s Is The Anti-J.C. Penney.”
Forbes notes that: “Macy’s stock roundly outperforms, up 31.6% in the last 12 months and 24.8% in 2013. J.C. Penney shares made respective declines of 43.4% and 4.3%. The S&P Consumer Discretionary Index rose 30.9% and 17.6%.
“What about other rivals? For Target (TGT), a 26.8% and 18% increase. Gap (GPS), 50.1% and 32.8% increases. Even Kohl’s (KSS), up 5.7% and 15.3%.”
Too bad you can’t get a BOGO on Macy’s stock.
But while retail has been a leading sector this year, Barron’s cautions that there’s a short-term risk for a correction in the stocks and urges a bargain-basement approach: “fundamentals aside, waiting for sale prices in top-performing retail stocks seems to be the best way to play right now.”
Want to be a better-informed shopper?
Value Line’s Investment Education section highlights the retail sector, explaining the nitty-gritty, such as hitting the balance between full-priced selling and discounting to keep gross margins healthy —and the pricey perils of an unsightly fashion misstep for merchandisers.
Fashion missteps. We hate when that happens. And in our case, it’s almost every morning!
BetterInvesting is a national nonprofit organization that has been empowering individual investors since 1951. Founded in Detroit, the association (formerly known as National Association of Investors Corporation) was born out of the conviction that anyone can become a successful long-term investor by following commonsense investing practices. BetterInvesting has helped more than 5 million people become better, more informed investors by providing webinars, in-person events, easy-to-use online tools for analyzing stocks and mutual funds, a monthly magazine and a community of volunteers and like-minded investors. For more information about BetterInvesting, visit its website at http://www.betterinvesting.org/investing/landing/openhouse/blog/index.html or call toll free (877) 275-6242.